Kuwait in Watt land

January 7, 1983

If you want a graphic illustration of how the world balance of economic power has shifted in the past decade - with Middle East nations playing a larger and larger role because of their oil wealth - consider InteriorSecretary Watt's new proposal to grant mineral exploration rights on US public lands to the tiny country of Kuwait.

Such a step, assuming there is no last-minute snag, could mean the infusion of new investment money into the US from one of the richest oil-producing nations. Other Mideast nations would be expected to seek similar exploration rights under terms of the US Mineral Lands Leasing Act. The decision would also further the administration's goal of increasing energy and mineral development in the United States.

What must be asked by Congress, as well as the American public, is the extent to which the administration's policy is consistent with national security considerations and the need to safeguard the environment. Also, whether the administration is using the terms of the Mineral Act to best advantage. The legislation specifies that US mineral rights can be granted to another nation provided that nation gives the US similar rights. Last year the administration granted mineral rights to three nations - Canada, Cyprus, and Sweden - all of which have laws restricting foreign investment. In Kuwait, meanwhile, mineral resources are nationalized.

To raise such issues is not to disallow the benefits to the US of mineral exploration by other nations. Much of the industrial infrastructure of the US in the last century was the result of investment from abroad. Kuwait, moreover, proved itself a particularly savvy investor last year by gaining control (at a cost of $2.5 billion) of Santa Fe International Corporation, an energy exploration firm.

It should also be noted that oil-producing nations in general have invested sizable portions of their wealth in the US. They have tended to be conservative in their investment practices, preferring the stock market and land purchases.

So mineral leasing by Kuwaiti exploration teams seems neither illogical nor improper. But lawmakers must ensure that mineral rights - to whomever granted - be given out only after the most careful scrutiny for national security implications, and after receiving iron-clad guarantees that US firms will gain similar rights abroad. At the same time the administration should be cautious in granting such leases in the first place - whether to US firms or to foreign nations. They should be part of a comprehensive and long-range exploration plan that does not lose sight of the fact that US public lands are just that - public lands belonging to and intended for the benefit of the American people.